PUBLIX Passes Good Attitudes Down the Line

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PUBLIX Passes Good Attitudes Down the Line

By Pan Demetrakakes - 09/01/2015

Publix Supermarkets regularly basks in the glow of generous praise from its customers,the communities it serves and even the business and trade press. Consistently ranked among the nation's largest privately held companies in addition to one of its best employers, Publix has enjoyed virtual domination in the southeast.

This year, the grocer celebrated its 85th anniversary and credits its founder, George Jenkins (or "Mr. George" as he's known), with the unique customer-oriented culture that persists today. In fact, one of Mr. George's lessons teaches associates to "treat customers like royalty."

Today's CEO, Ed Crenshaw, is the son of Jenkins' daughter Dolores, and has been responsible for much of Publix's success since he took the helm in 2008.

Publix has grown from one store in Winter Haven, Fla., into the largest employee-owned supermarket in the country–with 1,080 retail food supermarkets in Florida, Georgia, North Carolina, South Carolina, Alabama and Tennessee. It has put up impressive numbers: in the most recent quarter, sales were up 6 percent and earnings up 19.5 percent from the same period last year, with same-store sales up 4.1 percent. Its net profit margin, at about 6.5 percent, greatly surpasses its competitors'.

The foundation of Publix' success is top-notch customer service. Company president Todd Jones told Forbes that, when it comes to service, quality and price, "You've got to be good at two of them, and the best at one. We make service our number one, then quality and then price."

Good service starts with good attitudes on the floor, which is built into Publix' DNA. Throughout its 85-year history, Publix, while controlled by the Jenkins family, has always been employee-owned. The company is privately held, but it issues "stock" that is not listed on any public exchange, but that confers ownership, appreciates in value and pays dividends. All employees with at least one year and 1,000 hours of service get awarded stock equal to 8.5 percent of their base pay. This can really add up: the company says that a store manager of 20 years' tenure can have up to $300,000 in stock and another $30,000 in dividends.

Good service by inspired employees is a big part of the reason why Publix scored big in consumer satisfaction. It came in second in the latest Consumer Reports supermarket survey, and consistently comes in at or near the top in the American Consumer Satisfaction Index, published by the University of Michigan. Individual stores regularly get rave reviews on Yelp and other consumer/social media, partly inspired by appealing products like sweetened tea, submarine sandwiches and chocolate chip cookies.

Publix has been dipping its toe into online marketing and service, although it's not rushing into anything. Speaking at a conference at the Food Marketing Institute's recent annual show, Dave Bornmann, senior vice president for business development, said that Publix is taking a cautious approach to click-and-collect, because of the challenges of integrating it into existing operations: "If you're not careful, you may disrupt the experience of shoppers who choose not to do that."

In a way, Publix is being dragged into online service willy-nilly. Shipt, a third-party delivery service that uses independent shoppers/deliverers, has established delivery for Publix groceries in Tampa Bay, Orlando and Atlanta. (The Tampa Bay service proved so popular when it debuted in August that it crashed the Shipt website and left it initially without enough shoppers.) Unlike its rival Instacart, Shipt operates without forming partnerships with retailers or even getting their consent–a fact that Publix officials have made clear in public statements.